Square poaches Facebook advertising exec Gokul Rajaram

SAN FRANCISCO -- Gokul Rajaram, who oversaw the development of products for Facebook's advertising business, has been hired away by Square.

The defection comes as Facebook is under pressure to prove the effectiveness of advertising on the giant social network to boost its slumping stock price. Advertising accounts for about 85% of Facebook's revenue.

Rajaram led the team that created all of the advertising products on Facebook. Mike Hudack, who worked on that team focusing on measuring the effectiveness of ads, will replace him.

Pivotal Research Group analyst Brian Wieser said Facebook investors should not be alarmed. Hudack's ascension could signal a renewed push to court Madison Avenue. Hudack was the co-founder and chief executive of Blip.tv before joining Facebook and has experience working with major brands in New York.

Much like Google, Facebook has become an increasingly popular place for small- and medium-sized businesses to advertise. These businesses could account for much of Facebook's advertising revenue growth this year, Wieser said.

Hudack's appointment "is at minimum notable," Wieser said, "if it indicates where the company is focused and whether it's trying to reinforce relationships [on Madison Avenue] and hopefully grow them."

Rajaram is best known as "the father of Google AdSense." He joined Facebook in August 2010 after Facebook bought his company Chai Labs. He is joining Square as its product engineering lead.

Square, with hundreds of millions in funding and a $3.25-billion valuation, is one of Silicon Valley's most talked about startups. It has recently released a couple of high-profile products including a new online marketplace for merchants and Square Register, which allows brick-and-mortar retailers to use an Apple iPad as a cash register.

Rajaram will be the lead product developer in charge of Square Register, Square said. Rajaram will also work on other products.